S&P was stunned, and called the CBO which confirmed the
error. Then on Friday evening, they held another meeting, and
re-wrote the press release to focus more on politics, delivering
the downgrade with a re-cast rationale.

Now look,
you can make a good defense of the re-cast rationale. The
debt ceiling mess, the political gridlock, and the talk of
default are/were real. S&P is right to see these as real
issues, but if you're going to make the most controversial
ratings call on the world's biggest debt issue by far, and if
you're part of a government-sponsored cartel whose sole job is to
rate this stuff, the idea of going back and changing your work to
get the same desired outcome after you make an error is an
egregiously bad decision.

Governments always fight back against ratings agencies. Shooting
the messenger is a time-honored tradition. We get that.

But while the downgrade was always going to invite retaliation,
the inevitable Congressional hearings on the future of ratings
agencies might actually be interesting.

PS: Another point to think about: While it's
remarkable that S&P just went back and changed its press
release after discovering the error, the error itself is what's
really astounding. For a company whose sole job is to rate
credit, not understand how budgets are scored by the CBO is
astounding.